November 22, 2008

I have already directed my economic team to come up with an Economic Recovery Plan that will mean 2.5 million more jobs by January of 2011 – a plan big enough to meet the challenges we face that I intend to sign soon after taking office. We’ll be working out the details in the weeks ahead, but it will be a two-year, nationwide effort to jumpstart job creation in America and lay the foundation for a strong and growing economy. We’ll put people back to work rebuilding our crumbling roads and bridges, modernizing schools that are failing our children, and building wind farms and solar panels; fuel-efficient cars and the alternative energy technologies that can free us from our dependence on foreign oil and keep our economy competitive in the years ahead.

How much of this can actually be done in 24 months?

It's crucial to understand that this isn't December 8, 1941 anymore. The people who voted for Obama have spent decades making it extremely difficult to do quickly anything physical. For example, California governor Arnold Schwarzenegger sponsored a bunch of bond initiatives that passed in 2006. But, I am told by a Sacramento insider, that, two years later, no dirt has been turned. I'm sure that a lot of environmental scientists, lawyers, and administrators have been pulling down paychecks, but in the physical world, nothing has happened in 24 months.

So, let's look at Obama's suggestions one by one:

Yes, we can quickly put people to work "rebuilding crumbling roads and bridges." There aren't, as far as I know, big environmental impact snags with resurfacing existing freeways. There's this one lane in particular that every time I drive it takes a day off the life of my car. Of course, all this would just make driving more enjoyable so it's the opposite of the "green" philosophy of the rest of Obama's thinking.

What about "modernizing schools that are failing our children"? First of all, there's little relationship between physically spiffy schools and non-failing schools. Los Angeles has spent something like $24 billion on school construction and remodeling in recent years with no clear return on the money. For example, the brand new, state of the art East Valley High School that opened in the San Fernando Valley a couple of years ago can't get enough students to fill it because it's overrun by gangs. Parents are lying about where they live in order to get their kids into the two pre-WWII high schools in the neighborhood because they are terrified of the brand new one. Here are the three comments about East Valley that I found on a website:

Although the students underneath me have similar beliefs about the school, I feeel that the school is a work in progress. It could be better but at the moment it is unorganized and undergoing many stumbling blocks. I feel that we need help from other schools and officials to make it better. ... Read moreRead less

Posted by a student on 11/09/07

I am a student at east valley high school in north hollywood california. I never feel safe at this school. The teachers have no authority over their classrooms, or students...... I'm definetly not graduating from a school like this. ... Read moreRead less

Posted by a student on 11/06/07

I find some of the teachers top rated, committed and have great teaching. However, the school culture is a mess...tagging everywhere and the principal seems not to care about all these.

Further, most of LA's school projects took many years to get off the ground. Construction of the 2500 student Belmont Learning Center near downtown LA that just opened was a notorious 20-year nightmare. From Wikipedia:

The project to build the school began in 1988. The site of the school had previously been used for industrial purposes, and a concern of soil contamination was confirmed during development in 1999. This resulted in a temporary halt to construction.

In December 2000 Superintendent Roy Romer[5] saved the project and began reviewing private bids to address the additional issues at the site. In 2002, "An Alliance for a Better Community" was selected to finish the project.[citation needed]

Further complicating the development, in September 2002 an earthquake fault was detected on the northeast portion of the plot. The project was again temporarily suspended.[6]

In May 2003 the Los Angeles Unified School District voted to finish the school but with certain modifications: inclusion of a 10 to 12 acre (4 to 4.9 ha) park; a 500 seat learning academy; a library; an auditorium; and a parent center. Once completed, these changes resulted in one of the more luxurious schools of the urban sections of the district.[citation needed]

The total project cost was then estimated to be around US$300 million. A voter initiative bond called Measure K provided $3.3 billion of the construction funds, with city funds supplying the rest.[citation needed]

In December 2004, approximately 60 percent of the buildings were demolished because of the earthquake fault and then construction continued.

What about upgrading existing schools? Well, one obvious problem is that it's hard to employ a lot of construction workers on schools except during the summer vacation, unless the school is so empty that you can shut down part of it and turn it into a construction site. But, if so few students go to it, why bother?

How about "building wind farms and solar panels?" Once again, there giant environmental issues. Wind farms are not popular in California. Further, hooking remote wind farms into the electrical grid is not trivial.

Finally, "fuel-efficient cars and the alternative energy technologies that can free us from our dependence on foreign oil and keep our economy competitive in the years ahead" haven't gone through the formality of being invented yet.

So, what do I think Obama will actually do in the short term?

A lot of state and local governments will need bailing out, most notably California, to prevent massive layoffs of civil servants. I expect to see, in the spirit of bipartisanship upon which Obama campaigned, a summit meeting between President Obama and Governor Schwarzenegger in which Obama hands tens of billions to California to meet payroll and even hire some more paper pushers and social workers. That's what Obama's entire career has been devoted to: taking money from productive people and hiring people like himself to collect paychecks while failing to solve social problems. That's his base.

Everybody is talking about "fiscal stimulus" and "infrastructure projects" (i.e., public works, like FDR's WPA). Larry Summers says that there is a "multiplier effect" and every dollar of government spending generates more dollars of overall economic activity in the American economy.

But nobody is talking about the obvious: Will the public works jobs be restricted to American citizens? To American citizens plus legal residents? Or will they just suck in more millions from south of the border as the Housing Bubble did, who will send tens of billions back home, depriving America of Larry's promised Multiplier Effect?

The real economic collapse is happening in the four sand states, California, Nevada, Arizona, and Florida. Sending billions to them for infrastructure projects would mean a large fraction of the public works payroll would go to illegal and legal aliens.

The one sure way to keep the unemployment rate in California (now 8.2%) from growing so fast is to have illegal immigrants go home. It's a lot cheaper for all concerned if ex-construction workers are unemployed in Mexico or Guatemala than if they are unemployed in California. But nobody is mentioning that.

Next, Obama's big goal is to set off an Alternative Energy Bubble to inflate the economy in time for the 2012 election. But, those kind of infrastructure projects (e.g., erecting a massive number of ugly windmills that chop migratory birds to shreds) take forever to get off the ground in Blue States due to environmental restrictions. In Red States, it's faster to get going. Will Obama want to send most of the money to Republican states? Or will he override the environmental dogmas of his base?

The kind of thing we can spend a lot of money on within 2009 are projects like freeway resurfacing -- exactly the opposite of what all the Save the World types who voted for Obama want.

November 21, 2008

Here's a wonderfully clueless New York Timesletter to the editor in response to that amusing NYT article "Mormons Tipped Scale in Ban on Gay Marriage" about how Mormons hijacked the gay marriage initiative in California. (By the way, gay marriage only got 48% in California, while Barack Obama got 61%. What fraction of that 13% of the Californian electorate who voted for Obama but not for gay marriage was Mormon? Eensy or teensy?)

To the Editor:

As a California resident who voted no on Proposition 8 [i.e., supported gay marriage], I am a little confused as to why money from outside the state is allowed to affect the outcome of our elections. If I wanted to live my life according to the rules of the Mormon Church, I would move to Utah.

Barbara DavilmanStudio City, Calif.

You have to feel sorry for the poor villagers of Studio City whose indigenous folkways are under constant mass media assault from all those rich city slickers in Provo. Mormons grow up knowing all about how to make snazzy TV commercials, while the innocent Studio Citians only learn from their elders how to communicate via smoke signals and notches carved in tree trunks by the side of the trail.

----------* I'm kidding. I grew up in Studio City and had to put up with a lot of guff when I went to college in Texas about having a hometown called "Studio City," which I admit sounds like it was made up for parodistic purposes.

It was like the slums of Beverly Hills. The man across the street had a dozen Emmy awards in technical categories and another neighbor appeared in several hundred commercials.

I always thought that it was ironic that Barack Obama was running on "hope" and "change" because those two vague mantras are exactly what Bill Clinton ran on in 1992, what with being from Hope, Arkansas and all. (A couple of months after Clinton's election, I got an invitation to a marketing convention whose theme was "The Power of Change.") But the lack of "change" in the public facade of the nascent Obama Administration is getting pretty funny.

Obama's problem is that he's so inexperienced that he barely knows anybody other than a bunch of thuggish Chicago political operators like David Axelrod and Rahm Emanuel and a lot of unpresentable far leftists with whom he hung out in the 1980s and 1990s. So, for lack of a better idea, he's just plugging in Clinton Administration retreads in the top jobs. The "change" part applied to who gets to be President (and who will get the lower level jobs after the public loses interest).

Besides wooing Hillary Clinton for Secretary of State, the Obamas announced today that they were sending their daughters to Sidwell Friends School, the same pricey ($28,000+) school where the Clintons sent Chelsea. Although Michelle Obama claimed publicly that public schools were under consideration, she never bothered to tour any.

"Equally revealing was media response to the Clintons's announcement that they were sending their daughter, Chelsea, to Sidwell Friends, an $11,000-a-year private school in northwest Washington. When columnist Mark Shields praised Sidwell on The MacNeil/Lehrer NewsHour, he had to note that his children went there, as did Jim Lehrer's and Judy Woodruff's. Woodruff's husband, Al Hunt, made a similar disclosure while defending Clinton on Capital Gang. Carl Rowan touted Sidwell on Inside Washington, pointing out that his grandchildren attended the school. Howard Fineman, whose daughter was in kindergarten at Sidwell, said he "shamelessly lobbied" the Clintons to choose the school."

So don't worry about being duplicitous. Do what the Clintons and all those media liberals, white and black, did—put your children's welfare first!

But, don't you dare put the welfare of your fellow citizen's children ahead of those of people who want to sneak into our country.

By the way, all this talk about Hillary Clinton as Secretary of State reminds me of conversations that must go on these days when they're trying to cast superheroes' girlfriends in big Hollywood movies:

"How about Maggie Gyllenhaal?"

"She looks like a sad cartoon turtle. Why would the hero fall for her?"

"Okay, what about Kirsten Dunst?"

"Have you looked at her teeth?"

"Well, how about Katie Holmes?"

"Yeah, she looks okay. Let's give her agent a ... Oh, wait, no, this is too big a production to risk that her husband will stay out of the way. He's got too much energy. Better cross her off the list."

By the way, the rumor is that Bill Richardson, who had a couple of cabinet posts in the Clinton Administration (where his duties included considering Monica Lewinsky for a job) is in line for Secretary of Commerce. The reason Richardson is always up for Cabinet jobs is because he's 3/4th's Mexican (his grandfather was a raffish WASP from New England who fit in better in Latin America, where he had several families. His more straight-laced dad opened Citibank's Mexico City office long ago). So Democrats figure that appointing Richardson is a good way to pander to the the tsunami of Mexican voters that is always about to arrive.

The problem with Richardson as the perfect Hispandering Ploy is that unlike the Beltway political junkies who are always talking Richardson up, Mexicans don't pay much attention to politics, so most of them don't notice Richardson's 3/4 Mexicanness because he doesn't have a Spanish surname. So, it's a waste.

Moreover, when Richardson is actually indoors working, like he was when he spent months campaigning last year in Iowa and New Hampshire, his tan fades and then he just looks like another white guy with a WASP name, so even the few Mexican voters who watch the political news on TV won't notice they are being pandered to.

After Richardson dropped out of the Presidential race, he disappeared for a long time and suddenly re-emerged, presumably from some beach somewhere (Spring Break in Cancun?), looking like an Aztec sun god and sporting the goatee that makes him now look like the head of the nefarious villainous organization in a big budget action movie. So, unless Obama intends to let Richardson spend most of his time as Secretary of Commerce focusing on increasing American industry's sun tan lotion exports to Cabo San Lucas, he'll end up with just another paleface with an English name. (Actually, permanently stationing him in Cabo seems like an ideal use of Richardson's talents.)

Billionaire homebuilder Eli Broad and the other geniuses behind the Los Angeles Museum of Contemporary Art have finally achieved such sophistication in their artistic tastes that, according to a report this week in the LA Times, their museum is going broke.

In a bid to boost minority homeownership, President Bush will ask Congress for authority to eliminate the down-payment requirement for Federal Housing Administration loans.

In announcing the plan Monday at a home builders show in Las Vegas, Federal Housing Commissioner John Weicher called the proposal the "most significant FHA initiative in more than a decade." It would lead to 150,000 first-time owners annually, he said.

It's not the particular government program that's of major interest, it's the message the Bush Administration was sending. Federal regulators are supposed to take away the punchbowl when the party gets interesting, but announcing that the President hates down payments, that the Chief Executive feels that requiring people with bad credit to put money down on a house is UnAmerican and probably racist, at a homebuilder's convention in Las Vegas, well, I've exhausted all the punchbowl similes ... This is liking filling all the nasal decongestant inhalers at the Betty Ford Clinic with pure pharmaceutical cocaine.

The percentage of first-time homebuyers in California (Ground Zero of the disaster) who put no money down increased from 11% in 2002, when Bush first banged the anti-minority evils of down payments to 33% in 2004 to 41% in 2006. So, Bush certainly got what he repeatedly called for -- a big weakening in credit standards.

Nothing-down options are available on the private mortgage market, but, in general, they require the borrower to have pristine credit. Bush's proposed change would extend the nothing-down option to borrowers with blemished credit.

The FHA isn't a direct lender, but guarantees loan payments for mortgages on moderately priced owner-occupied property. The FHA guarantee now permits private lenders to finance as much as 97% of the purchase price of a home for millions of low- and middle-income borrowers.

In the proposal soon to be delivered to Congress, Bush would allow the FHA to guarantee loans for the full purchase price of the home, plus down-payment costs. As a practical matter, the FHA would guarantee mortgages as high as 103% of the value of the underlying property.

103% Loan-to-Value?

Sure, why not? What could possibly go wrong?

Weicher says the change is aimed at potential home buyers whose credit excludes them from the private mortgage market. Borrowers would need sufficient income to meet monthly payments. But, he said, the plan would eliminate the single largest impediment to homeownership for millions of households — lack of money for a down payment.

Well, lack of money for a down payment was supposed to be an impediment to homeownership.

The most recent government figures show a national home ownership rate of 68.4%, the highest ever. But less than half of black and Latino householders own the home in which they live. Bush has a goal of 5.5 million new minority homeowners this decade.

FHA loans carry higher risks of delinquency and foreclosure than do private mortgages, and the proposed change presumably will lead to greater losses to the government than the current program does.

Weicher said the added risk will be offset by higher fees charged to borrowers who opt to make no down payment.

On a $100,000 mortgage with an interest rate of about 6%, the nothing-down borrower could expect closing costs $750 higher than other FHA customers. Monthly house payments would be slightly higher.

Affordable-housing advocate Scott Syphax, CEO of Nehemiah Corp., called the proposal "revolutionary." It marks the clearest official acknowledgment that millions of potential homeowners are being blocked by high down-payment costs, he says.

In 1994, Nehemiah Corporation of America (“Nehemiah”) was founded by a young African-American preacher with a $5,000 loan from a Baptist church in Sacramento, California. ... However, as its Vision Statement indicates, its charitable activities are more expansive than just down payment assistance, it also provides opportunities for economic empowerment and community revitalization.

Personally, I can't make sense out of what they do, but it seems like they do it on a pretty large scale. The point is that everybody who was anybody across the ideological board was for the steps that led to the mortgage meltdown.

November 20, 2008

Here's the official mural, entitled "Stepping Into the American Dream," that Javier Cortada was commissioned to paint for President Bush's October 15, 2002 White House Conference on Minority Homeownership, in which Bush denounced down payments as the chief barrier to adding 5.5 million additional minority homeowners. Bush orated:

Two-thirds of all Americans own their homes, yet we have a problem here in America because few than half of the Hispanics and half the African Americans own the home. That's a homeownership gap. It's a -- it's a gap that we've got to work together to close for the good of our country, for the sake of a more hopeful future. We've got to work to knock down the barriers that have created a homeownership gap.

I set an ambitious goal. It's one that I believe we can achieve. It's a clear goal, that by the end of this decade we'll increase the number of minority homeowners by at least 5.5 million families. (Applause.)

Some may think that's a stretch. I don't think it is. I think it is realistic. I know we're going to have to work together to achieve it. But when we do our communities will be stronger and so will our economy. Achieving the goal is going to require some good policies out of Washington. And it's going to require a strong commitment from those of you involved in the housing industry.

Just by showing up at the conference, you show your commitment. And together, together we will work over the next decade to enable millions of our fellow Americans to own a piece of their own property, and that's their home.

I appreciate so very much the home owners who are with us today, the Arias family, newly arrived from Peru. They live in Baltimore. Thanks to the Association of Real Estate Brokers, the help of some good folks in Baltimore, they figured out how to purchase their own home. Imagine to be coming to our country without a home, with a simple dream. And now they're on stage here at this conference being one of the new home owners in the greatest land on the face of the Earth. I appreciate the Arias family coming. (Applause.)...

To open up the doors of homeownership there are some barriers, and I want to talk about four that need to be overcome. First, down payments. A lot of folks can't make a down payment. They may be qualified. They may desire to buy a home, but they don't have the money to make a down payment. I think if you were to talk to a lot of families that are desirous to have a home, they would tell you that the down payment is the hurdle that they can't cross.

Miami-based Cuban-American artist Xavier Cortada today unveiled his mural, Stepping into the American Dream, in a ceremony hosted by Housing and Urban Development Secretary Mel Martinez.

Cortada painted the mural at the White House Conference on Minority Homeownership, held on October 15 in Washington, DC. The painting illustrates the Blueprint for the American Dream Partnership, a collaborative effort of the Bush Administration and members of the housing industry to meet the President’s goal of 5.5 million new minority homeowners by the year 2010.

“The Bush Administration is committed to helping people across the country realize the American Dream,” Martinez said at the unveiling ceremony. “We are proud to work with our partners in the private sector to achieve the President’s ambitious goal. This mural is a visual representation of our strong mutual commitment.”

Stepping into the American Dream, 96”x96”, is acrylic and mixed media on canvas. Images in the mural are meant to represent the various avenues through which individuals and families can achieve homeownership – homebuyer education, adequate supply of affordable homes, down payment assistance, and mortgage financing.

The mural features short messages from new homeowners throughout the country, as well as from President Bush, Martinez, and other members of the Blueprint Partnership.

Cortada has exhibited his works in museums, galleries and cultural venues around the world. He has served as Artistic Director of various efforts sponsored by Miami-Dade Art in Public Places, including Master Peace (a school-based art project in Miami-Dade County Public Schools) and PATH (Public Art Transforming Housing).

HUD is the nation’s housing agency committed to increasing homeownership, particularly among minorities, creating affordable housing opportunities for low-income Americans, supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development as well as enforces the nation’s fair housing laws.

My short story, "Unreal Estate," is now online in full at The American Conservative website. It's a tale of California scheming: in 2005, two average brothers-in-law decide to speculate in the exurban Southern California real estate market, buying an exurban McMansion together to flip it for a quick profit.

I need to point out, though, that my story's punchline was left out, presumably for reasons of space. I plagiarized my last line shamelessly from the punchline of the old joke about the Trappist monk who is only allowed by his abbot to say two words every five years. You can read that joke here and apply it to the end of my story.

Queen's University in Kingston, Ont., has hired six students whose jobs as "dialogue facilitators" will involve intervening in conversations among students in dining halls and common rooms to encourage discussion of such social justice issues as race, ethnicity, gender, sexual orientation, ability and social class.

"If there's a teachable moment, we'll take it," said assistant dean of student affairs Arig Girgrah, who runs the program. "A lot of community building happens around food and dining."

She gave the example of a conversation about a gay character on television as a good example of such a moment.

"It is all about creating opportunities to dialogue and reflect on issues of social identity," Ms. Girgrah said. "This is not about preaching. It's not about advice giving. It's about hearing where students are at."

Jason Laker, dean of student affairs, said their activities will also include formal discussion sessions, perhaps after controversial incidents in residence, and open discussions of topical books or movies.

"They're not disciplinarians. They're called facilitators for a reason," he said, adding that such a program is of particular value now that so much communication by young people happens over the Internet.

"It's not trying to stifle something. It's trying to foster something," he said. "We're not trying to be parental."

Like dons, who serve as student authorities in residence, the six facilitators will receive full room and board and a stipend for the full-year commitment, and will receive regular training....

Daniel Hayward, a 46-year-old Master's of Divinity student, applied to be a facilitator believing the role would offer him an opportunity to connect with many different students.

Yes, there's nothing today's coeds look forward to more than the creepy 46-year-old Divinity student who is paid to chat them up about white privilege!

"It's an opportunity to interact with lots of people, hear their stories, about the experiences they've had, hear the questions they're asking," he said in an interview yesterday. "It's not like we roam around the halls looking for people having conversations. If somebody is yelling something across the dining hall that's a racial slur, yes, we will intervene in that situation.

"We are trained to interrupt behaviour in a non-blameful and non-judgmental manner, so it's not like we're pulling someone aside and reprimanding them about their behaviour. It is honestly trying to get to the root of what they're trying to say - seeing if that can be said in a different manner."

Touting the Intergroup Dialogue Program as "unique among Canadian universities," but modelled on programs in the United States, an administration newsletter says it will promote "a lasting experience of inclusive community and shared humanity."

It is just one of many recent efforts to promote diversity - such as gender-neutral washrooms, prayer space, and halal and kosher food service - at a school that is still smarting from a report on systemic racism two years ago that criticized its "culture of whiteness."

Michael Kinsley writes about something the press studiously ignored during our recent campaign, which sure seemed more like an extended coronation ceremony than an actual contest: although he claimed he was quitting, Obama still smokes.

One way he avoided press scrutiny in general was by not traveling by bus to campaign events with the press on-board. Instead, he's grabbed a ride with a campaign staffer and light up a cigarette.

With Obama's high-strung, sensitive personality, it's likely a good thing that he self-medicates with cigarettes. The odds of him coming down with lung cancer and making Joe Biden President are not infinitesimal, but they aren't so high that we'd want Obama to be himself with no nicotine in his system to calm him down.

It's interesting that there is no press interest in whatever else he might be medicated with. Obama released a brief, unrevealing letter from his doctor awhile back, but it didn't mention what prescription drugs he has taken.

I would guess that Obama has been on anti-depressants at least once in his life, and probably tranquilizers as well. Not that there's anything wrong with that! The number of people who have benefited from these kind of drugs must be in the scores of millions by now. For example, I had prescriptions for both anti-depressants and tranquilizers for about six weeks after being diagnosed with cancer in 1996. In particular, the tranquilizers were effective in fending off panic attacks. I was prone to having a panic attack not only over fear of dying but, more debilitatingly, I would get a panic attack over fear that I would have a panic attack -- a rather nasty vicious circle. After a couple of weeks, just having the bottle of Xanax in my pocket was reassuring enough that if I started having a panic attack, I could quell it, so I didn't even have to take Xanax any more -- just carry it around like a good luck charm for another month.

Finally, a reader who lives in the same apartment complex as Obama's mystery man Mike Signator offers a plausible explanation of why Obama often briefly visits Signator's apartment after working out in the apartment building's gym: to take a private shower. In an age of cellphone cameras, the last thing we need on the Internet are pictures of the President-Elect in the health club shower.

November 19, 2008

I would assume that Sarah Palin is about as smart as her erstwhile opponent, Vice President-Elect Joe Biden, a man who has gone through life with a giant chip on his shoulder about his IQ. Whether that's smart enough to be President, I'll leave up to you.

On the other hand, I'm sure Biden would beat Palin if they took a current events quiz on foreign affairs.

Why?

The chief answer is obvious, which means that the mainstream discourse is oblivious to it. Governor Palin is a lady. Specifically, she's a mom, a mom with a whole bunch of kids. If you aren't a mom, it's hard to grasp just how much more interesting your family, and the community they live in, is than the Law of the Sea Conference or the Tbilisi pipeline. In contrast, Mr. Biden, who isn't a mom, has time on his hands for paying attention to stuff like that because Mrs. Biden worries about the important things for him.

November 18, 2008

BUSH ADMINISTRATION ANNOUNCES NEW HUD "ZERO DOWN PAYMENT" MORTGAGE:Initiative Aimed at Removing Major Barrier to Homeownership

LAS VEGAS - As part of President Bush's ongoing effort to help American families achieve the dream of homeownership, Federal Housing Commissioner John C. Weicher today announced that HUD is proposing to offer a "zero down payment" mortgage, the most significant initiative by the Federal Housing Administration in over a decade. This action would help remove the greatest barrier facing first-time homebuyers - the lack of funds for a down payment on a mortgage.

Speaking at the National Association of Home Builders' annual convention, Commissioner Weicher indicated that the proposal, part of HUD's Fiscal Year 2005 budget request, would eliminate the statutory requirement of a minimum three percent down payment for FHA-insured single-family mortgages for first-time homebuyers.

"Offering FHA mortgages with no down payment will unlock the door to homeownership for hundreds of thousands of American families, particularly minorities," said HUD's Acting Secretary Alphonso Jackson. "President Bush has pledged to create 5.5 million new minority homeowners this decade, and this historic initiative will help meet this goal."

Preliminary projections indicate that the new FHA mortgage product would generate about 150,000 homebuyers in the first year alone.

"This initiative would not only address a major hurdle to homeownership and allow many renters to afford their own home, it would help these families build wealth and become true stakeholders in their communities," said Commissioner Weicher. "In addition, it would help spur the production of new housing in this country."

For those that choose to participate in the Zero Down Payment program, HUD would charge a modestly higher insurance premium, which would be phased down over several years, and would also require families to undergo pre-purchase housing counseling.

HUD is the nation's housing agency committed to increasing homeownership, particularly among minorities; creating affordable housing opportunities for low-income Americans; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development as well as enforces the nation's fair housing laws. More information about HUD and its programs is available on the Internet at www.hud.gov and espanol.hud.gov.

This is the kind of thing that sends a message to private industry that not only will the government not crack down on zero down mortgages, it looks favorably upon them. Rather than regulators taking away the punchbowl when the party got interesting, it was pouring vodka in.

The Democrats want to bailout the Big 3 car companies with taxpayer dollars in order to keep the United Auto Workers union going, while the Republicans seem to want the firms to go into bankruptcy so a judge can rewrite their ruinous UAW contracts.

The funny thing is that white Republicans are a lot more likely to buy Detroit cars than are white Democrats.

The Detroit manufacturers' basic problem is that the kind of white people who voted for Obama will no way, no how buy cars built by UAW workers in the Detroit area. If SWPLs can't afford cars built by Japanese, German, or Swedish workers, then they will overwhelmingly prefer Japanese brand cars built by white hillbillies in places like Tennessee, Kentucky, and southern Ohio to anything built by UAW members anywhere near Detroit. (Blacks still buy Detroit cars, so this doesn't apply to them.)

So, the solution seems obvious. President-Elect Obama should use his vast network to get 10 million of his wildly enthusiastic white supporters to sign legally-binding contracts to buy, within the next three years, American-brand cars built by UAW workers. With that collateral, the Big 3 could then borrow enough money to get by.

Surely, the SWPLs would follow their leader in doing this, right?

You don't think so? You think that voting for Obama was just a fashion gesture, and doing something so unfashionable as buying a piece-of-crap UAW-built car is something they would never do?

Emmanuel Njoku thought he was living the American dream. The immigrant from Nigeria invested in real estate and rode the housing boom to great heights.

At the peak, Njoku owned 16 properties in Prince George's County, Md., just outside Washington, D.C. But with the housing bubble now burst, Njoku is living a nightmare.

Basically every other home in the upscale Promise neighborhood near Bowie, Md., is in foreclosure, says Njoku. He says one potential buyer took a look at the neighborhood, where Njoku once owned property, and decided it must be cursed.

In fact, more than 800 homes in this ZIP code are in some stage of the foreclosure process, according to the research firm RealtyTrac. One of them is the home Emmanuel Njoku and his family used to live in — a sprawling 7,000-square-foot house finished in stone. He purchased this million-dollar dream house at the age of 34, as a first-generation immigrant.

But Njoku couldn't afford the payments and moved out three months ago, and the bank is threatening foreclosure.

Njoku, a pharmacist by profession, got into real estate when his wife's health deteriorated after the birth of their second child. He hoped to supplement his salary. He succeeded beyond his wildest dreams. As the value of the homes he owned shot higher, he pulled equity out to buy other homes.

Njoku says it was all made possible by skyrocketing home prices and easy credit from lenders who helped him purchase homes while he was showing very little income.

"I have two guys that I literally called the miracle workers because they did a miracle. We're talking about situations where a salary of $20,000 purchased a $560,000 house."

Sound impossible? Here's how he did it: The down payment came from a credit card, and as the value of the house rose, Njoku was able to cash out $60,000 and then an additional $100,000. He says it was a "money generator."

An eager alliance of builders and lenders and investors, like Njoku, helped fuel the housing bubble. At the peak, in the summer of 2006, his 16 properties were worth more than $8 million. His net worth was over $2 million, he says.

"The appreciation factor — the refinance ability — made a sweet ride," he says. Njoku acknowledges he was naive.

Naive. No, not exactly. A commenter on this NPR story dredged this up this miscreant's personal website:

"As a new pharmacist, I investigated a second job for residual income. I learned the importance of time management and I began to seriously consider future financial planning. My first encounter with real estate investing was with the Carlton Sheets “NO MONEY DOWN" Program. With assistance from a personal coach, I learned how to build wealth through buying and renting carefully selected properties. My first investment transactions in May 2001 were a Housing and Urban Development (HUD) single family home and a townhouse in Capital Heights, Maryland. This was quite an exciting learning experience. My wife challenged me to attend pre-licensing classes at the Weichert Realtors Andrews office in Camp Springs, Maryland in the year 2001. I received my Maryland Real Estate License. The Rich Dad, Poor Dad home study course by Robert Kiosoki was instrumental in my investment education. I learned the importance of having a legacy for my son and daughter. I believe education is an on ongoing, lifelong decision. I am currently a student of the Donald Trump University Wealth Building Program."

"Over the years I have helped many families and individuals buy, rent or sell homes. I have assisted other investors, friends, family members, neighbors and co-workers. My past clients continuously reward me with referrals, the greatest compliment that I can receive."

He, like a lot of others, thought U.S. home prices would continue rising indefinitely. But now about half of his properties are in foreclosure, and the other half are worth less than he owes on them. He works nights as a pharmacist, but the income doesn't come close to covering his obligations. Bankruptcy is a real threat.

And as the bubble — that Njoku admits he helped to create — bursts, many of his neighbors in this majority African-American county are struggling, too.

"I don't honestly know how these communities are going to be able to bounce back. Quite frankly, it's scary because you have these beautiful homes, these beautiful communities that were striving, and now all of a sudden there's a silent suction of hope and progress out of the lives of people. It's just hard to put to words," Njoku says.

November 16, 2008

Here's an excerpt in which I uncharacteristically show some sympathy for Karl Rove and George Bush from my new VDARE.com column:

It’s important to fully understand why the lessons the two Texans, Rove and Bush, learned in their home state didn’t apply in other heavily Hispanic states.

So far, the mortgage meltdown hasn’t been as bad in Texas as in the four “Sand States” (as they were known on Wall Street during the Bubble): California, Nevada, Arizona, and Florida. These are home to half of the foreclosures and a large majority of the defaulted mortgage money.

Partly this is due to the Oil Bubble, which now appears to be ending. Oil prices over $100 per barrel kept the Texas economy strong in 2008, allowing debtors to avoid foreclosure.

Finally, what Rove and Bush missed was how different was Texas's economic and immigration history over the last three decades relative to the seemingly similar Sand States. Due to OPEC’s oil price increases in the 1970s, Texas experienced a huge construction boom thirty years ago. That mostly attracted construction workers from the rest of the U.S. rather than from Mexico, because Mexico was simultaneously experiencing its own oil boom following massive new discoveries.

When oil prices collapsed in 1982, the economies of Texas and Mexico slumped simultaneously. The big wave of post-1982 unemployed illegal aliens therefore headed for California rather than for Texas.

That’s why San Antonio had "surprisingly low levels" of immigration from 1965 to 2000, according to the important new book quantitatively comparing Mexican-Americans in San Antonio and Los Angeles in 1965 and 2000, Generations of Exclusion, by sociologists associated with the UCLA Chicano Studies Program.

The 2000 Census found that California’s foreign-born population (26 percent of all residents) was almost twice as large as Texas’s (14 percent).

As Texans, Rove and Bush apparently just couldn’t understand the quantity and quality of the immigration situation in the other heavily Hispanic states. In 2000, Texas had a large but fairly well-rooted, stable, and assimilated Mexican-American population that had a reasonable potential to make enough money in resource-extraction or other blue-collar jobs to afford to buy Texas’s cheap houses.

In sharp contrast, California had a huge and mostly new, ill-educated, and unassimilated Mexican-American population that didn’t have even a chance of making enough money in Silicon Valley or Hollywood to afford California’s already expensive houses.

So, who are the bad guys here: Texans or Californians? That's what people always want to know: who's the bad guy and who is the good guy?

The point is that our country's two biggest states are just very different, and much of that has its roots in their very different terrain.

For example, everybody in California would prefer to live near the Pacific because the climate and scenery are so nice. In contrast, in Texas (and the other Gulf of Mexico coastal states), the threat of hurricanes means people tend to prefer to live inland. Galveston used to be the dominant port of Texas's coast, until the hurricane of 1900 drowned 6000 people, after which Houston (45 miles inland and 45 feet above sea level) became the main metropolis. So, Affordable Family Formation works better in Texas than in California.

This doesn't make Texans or Californians good or evil, it just makes them different. And because the two states between them account for 60 million people, it's crucial that Americans get a better grip on the differences between the two states.

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